Coaching – A Growing or Over-Evaluated Industry?

Coaching has shown significant growth in recent years. LinkedIn estimates the global industry at $2.85 billion, while Google's data suggests a larger figure of $4.564 billion in 2023, marking a 64% increase since 2019. This variance may be due to different data sources and market analysis methods used by each platform.

In the US there are 23.000 certified coaches, and 71.000 worldwide in 2019. The International Coaching Federation (coachingfederation.org) talks about “robust growth” in 2023 and an increase of coaching practitioners between 2019 and 2020 by 54%.

Even though it is not easy to find exact numbers subdivided in countries and types of Coaching it is impossible to ignore the industry and its sales, number of coaches and coachees.

In the coaching study of the University of Marburg by Prof. Michael Stephan and Carmen Wegner “Coaching – Marktanalyse 2021/2022”, Market analysis 2021/2022 (5th Coaching study Marburg) the authors state that there is a disruptive moment in coaching due to the VUCA world, an era of significant shifts in workplace dynamics, technological advancements, and evolving personal and professional development needs.
The term 'VUCA world' refers to an environment characterized by volatility, uncertainty, complexity, and ambiguity, significantly impacting workplace dynamics and professional development.

The study researches business coaching from both perspectives, the coaches and companies, HR management and leaders who use or implement the service.

The authors define business coaching as a service focusing on people, a service primarily used as a tool for personal development within an organization, a professional context. The study aims at fostering transparency and professionalization of the industry as there are recognized coaching organizations, but the profession of a coach is not yet protected professionally and legally.

The following article will describe coaching in general and gives some analytical insights of the coaching industry based on the study of Marburg which includes all regions in Germany, the Bundesländer.

What exactly is coaching?

Coaching is a development process through which an individual gets support while learning to achieve a specific personal or professional competence resulting in improved performance. It involves guiding, encouraging, and challenging an individual or group to realize their full potential or transform in various aspects of life or work. Coaching is often goal oriented and focuses on the development of skills and the achievement of objectives.

Business coaching is a specialized form of coaching helping entrepreneurs, business owners, and professionals to achieve more in their business ventures. It involves a collaborative relationship between the coach and the client, where the coach provides guidance, support, encouragement, and accountability to help the client identify business goals, develop strategies to achieve these goals, and overcome any challenge that arise along the way.

What are the different forms of coaching?

There are different forms of coaching depending on who you coach and what the goal of coaching is.

1. Life Coaching

Focuses on personal development and aims to help individuals achieve personal goals, overcome obstacles, and make significant changes in their lives.

2. Executive Coaching

Aimed at improving leadership and management skills, enhancing decision-making, and fostering professional growth within an organizational context.

3. Career Coaching

Helps individuals make informed decisions about their career paths, navigate transitions, and leverage their strengths in the workplace.

4. Performance Coaching

Concentrates on enhancing an individual’s performance in their current role, targeting specific skills and goals related to job performance.

5. Skills Coaching

Focuses on the development of specific skills, such as communication, time management, or leadership abilities.

6. Health and Wellness Coaching

Supports individuals in achieving health-related goals, such as improving fitness, nutrition, and overall well-being. Life coaching is broader, focuses on well-being and goals in various areas of life and can include career, relationships, and personal growth.

7. Mentoring

Is slightly different from coaching. A more experienced individual is guiding a less experienced person. It does involve elements of coaching but is usually more directive and advice oriented.

8. Action Learning

Combines coaching with working on real-world projects or problems. A hands-on approach promoting learning through doing.  

Business coaching is a  form of coaching where a coach supports, encourages, and guides business participants like business owners,  and executives to achieve their business goals, improve their performance, and enhance their personal growth within the context of their business endeavours. Business coaching focuses on helping individuals or teams to develop skills, strategies, and mindset needed to navigate business challenges, capitalize on opportunities, and drive the success of their organization.

Business coaching can be subdivided into different areas of interest:

1. Startup Coaching: tailored for new entrepreneurs, helping them navigate the challenges of starting a new business, from idea validation to market entry.
2. SME Coaching: focuses on small- and medium-sized enterprises, addressing specific needs related to growth, scalability, and operational efficiency.
3. Corporate Coaching: aims at executives and leaders within larger organizations, focusing on leadership development, team dynamics, and organizational change.
4. Sales and Marketing Coaching: concentrates on improving sales strategies, marketing efforts, and customer engagement to drive business growth.
5. Financial Coaching: helps clients manage business finances more effectively, from cash flow management to financial planning and investment strategies.

Summarized: The key aspects of business coaching include goal setting and clarification, strategy development, problem-solving, performance improvement, accountability, and personal development.

When does a company decide for coaching?

To determine the kind of coaching a company needs involves a systematic process of assessing the current state of the organization, identifying gaps, and recognizing areas for improvement or growth. When to decide for coaching depends on different factors as the fulfilment of organizational goals, actual challenges, and the specific development needs of its employees or teams in that particular moment or strategically.

Reassuming, assessing needs and goals will be done through:

• Organizational assessment. Conduct a detailed analysis of the company’s performance, business goals, and strategic objectives. Business metrics, employee performance data, and market positioning are analysed.
• Identification of gaps. Gaps between current performance and desired outcomes. This refers to areas such as leadership skills, team collaboration, sales performance, or operational efficiency.
• Employee surveys and feedback. Gather input from employees at all levels to understand their point of view on training needs, challenges faced in roles, and areas where the seek improvement.
• Consultation with managers and leaders. Ask them where they see a need of coaching for themselves or their teams.

 The main factors to decide for coaching in a company are challenges in performance, leadership development, career progression and employee development, skills development, conflict resolution, organizational change, and other forms of change. During strategic shifts coaching can support the alignment of employees´ goals and behaviours with new strategic directions. Specific challenges can be addressed, obstacles overcome. Coaching helps to continuously learn and improve. Team dynamics, collaboration, communication can be analysed and improved. Leadership transitions can be accompanied for both sides, leaders, and employees. They also can be processed and implemented in a more conscious, mindful, and thus sustainable way.

Which companies and industries do work with coaches?

According to the Marburger study nearly all industries are working with coaches, but some clearly emphasize more on coaching:

• Life Science and social welfare
• Education and research
• Finance, banks and insurance
• Administration and public service
• Commerce and sales

Further industries are:

• Mechanical and electrical engineering
• Automotive industry

 

Coaching encompasses a broad spectrum of activities as its exact scope may vary depending on the context, the individual or team to be coached.

Within the coaching industry coaching itself is the most required task, followed by training and organizational development. Mediation, mentoring, talent management and psychotherapy are less requested.

The core methods of coaching

Several methods are used across different fields:

1. One-on-one coaching: involves personalized sessions between coach and coachee, focusing on the coachees´ goals, challenges, and development areas as well as state of development.
2. Group coaching: the coach works with individuals who share the same goals or challenges. The method fosters peer learning and support, alongside the guidance from the coach.
3. Peer coaching: Individuals of similar skills levels or roles coach each other by rotation. This emphasizes mutual growth and learning.
4. Executive coaching: Tailored for high-level executives and leaders it focuses on leadership development, decision-making skills, and navigating organizational politics and strategies.
5.  Skills coaching: Focuses on skills to be developed

 

A use case

In the following a concrete coaching use case in the area of finance will be described.

Situation: A mid-sized bank has been facing challenges due to the transformation of banking in general, in adapting to the rapidly changing financial landscape including digital transformations, regulatory changes, and intense competition. The leadership team recognizes the need to enhance the strategic decision-making capabilities and foster a more innovative and agile culture to stay competitive.

Objective: The primary goal of the coaching program is to develop the leadership skills of the bank´s senior executives, focusing on strategic thinking, change management and innovation leadership. The coaching program aims to equip them with the tools and mindset needed to lead the organization through its transformation effectively.

Coaching method: Executive coaching

Implementation:

1. Assessment to identify the strengths and weaknesses, areas to develop related to their leadership capabilities and strategic decision-making skills.
2. Personalized coaching plans for each executive are developed according to the result of the assessment and the goals to achieve.
3. One-on-one sessions with a specialized coach in leadership training in the financial sector. The sessions focus on real-life challenges and strategic opportunities the executives are facing providing a safe space for exploration, reflection, and planning.
4. In action learning projects the executives learn to practice new skills and approaches.
5. Continuous feedback and reflection on the progress of the coachees throughout the coaching program. Reflective practices to deepen learning and consolidate gains.
6. Group workshops in addition to the one-on-one coaching for better collaboration and sharing of best practices among the leadership team.

Through targeted executive coaching, providing tools, the bank´s leadership team is better equipped to face the challenges, drive strategic initiatives, and lead the organization towards growth and competitiveness.

Coaching can also take place for specific questions, groups, or problems. Coaching women for example could address gender specific aspects, or the coaching itself can be adapted to women according to psychological or sociological research that suggests differences in man´s  and women´s  communication for example.

See our upcoming coaching events in the UK:

The power of coaching for women in the workplace | 28.3.24, London (morganphilips.com)

Future-Proofing Leadership Breakfast Series | London (morganphilips.com)

 

 The challenges of coaching

Implementing coaching programs brings enormous benefits but it does include risks and possibilities of error.

Companies may face challenges when introducing coaching initiatives as the following:

1. Cultural misalignment: A coaching culture requires openness, trust, and a willingness to engage in constructive feedback and personal development. If the existing company culture values hierarchy, conformity, and competition over growth, learning, and integrating, coaching can be difficult, and the process marked by obstacles.
2. Lack of support from leadership: Successful coaching programs need strong endorsement and participation from senior leaders. Otherwise, coaching initiatives may struggle due to lack of traction and the belief that they are low priority.
3. Inadequate training for coaches, poor coaching risk: Not all managers or internal coaches have the natural skills or the training to coach effectively. Poor coaching can lead to frustration and demotivation, potentially harming the intended goals.
4. Undefined goals and objectives: Without clear objectives, coaching can become unfocused and ineffective. Coaching needs specific, measurable goals aligned with individual and organizational needs.
5. Resistance to change: Individuals may refuse or not collaborate in coaching due to scepticism, fear of exposure, or discomfort. Overcoming resistance requires careful communication and creating a safe environment for coaching.
6. Time constraints: Coaches and cochees often have demanding roles and do not find the time for coaching sessions. Time pressure can lead to ineffective coaching.
7. Measuring impact: How do you demonstrate the ROI? Quantifying improvements in performance, morale, and other intangible benefits requires robust metrics and an approved long-term view, which can be difficult to be established and tracked.
8. Scalability: With growing organizations coaching programs have to be adapted while maintaining quality and personalisation.
9. Confidentiality: Trust is fundamental to effective coaching. The fear of compromise of the proper career pass by sharing challenges or weaknesses is widely spread. Trust and psychological security are crucial for high-performance teams. (Read more here)
10. Consistency and quality control: To ensure quality between internal and external coaches can be a challenge. Standardizing coaching methodologies without compromising personalization requires a careful balance and oversight.

 

To be aware of these challenges and face them is part of the valuable process. It is an opportunity to uncover factors that may impede growth, innovation, and a positive company culture. Only think about resistance to change.

The choice of professional Coaching, and professional Talent Consulting will influence significantly.

Ask for our Talent Consulting and Coaching services.

Making success stories happen.

by Gabriele Kamps, PR & Communications Manager at Morgan Philips 

 

 

Share Your Thoughts
Your feedback is a vital part of our continuous improvement, and we look forward to hearing from you!